Correlation Between Cigna Corp and ReWalk Robotics
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and ReWalk Robotics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cigna Corp and ReWalk Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and ReWalk Robotics, you can compare the effects of market volatilities on Cigna Corp and ReWalk Robotics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cigna Corp with a short position of ReWalk Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and ReWalk Robotics.
Diversification Opportunities for Cigna Corp and ReWalk Robotics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cigna and ReWalk is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and ReWalk Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReWalk Robotics and Cigna Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cigna Corp are associated (or correlated) with ReWalk Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReWalk Robotics has no effect on the direction of Cigna Corp i.e., Cigna Corp and ReWalk Robotics go up and down completely randomly.
Pair Corralation between Cigna Corp and ReWalk Robotics
Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 0.4 times more return on investment than ReWalk Robotics. However, Cigna Corp is 2.48 times less risky than ReWalk Robotics. It trades about -0.01 of its potential returns per unit of risk. ReWalk Robotics is currently generating about -0.04 per unit of risk. If you would invest 31,954 in Cigna Corp on September 19, 2024 and sell it today you would lose (3,713) from holding Cigna Corp or give up 11.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cigna Corp vs. ReWalk Robotics
Performance |
| Timeline |
| Cigna Corp |
| ReWalk Robotics |
Cigna Corp and ReWalk Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and ReWalk Robotics
The main advantage of trading using opposite Cigna Corp and ReWalk Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, ReWalk Robotics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ReWalk Robotics will offset losses from the drop in ReWalk Robotics' long position.| Cigna Corp vs. ASGN Inc | Cigna Corp vs. Kforce Inc | Cigna Corp vs. Kelly Services A | Cigna Corp vs. Central Garden Pet |
| ReWalk Robotics vs. Xponential Fitness | ReWalk Robotics vs. National CineMedia | ReWalk Robotics vs. Reservoir Media | ReWalk Robotics vs. Celsius Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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